The government is likely to lower interest rates on small savings like Public Provident Fund (PPF) and post-office deposits, to bring them in line with market rates. The decision regarding the quantum of rate cut and its timing will be decided by the finance ministry.
Economic affairs secretary, Shaktikanta Das, said: “It has been decided that with regard to transmission of rates, the government will undertake review of the small savings rates also.”
There has been a call from bankers to lower interest rate on small savings as a high rate on such government schemes makes fixed deposits of banks uncompetitive.
Smalls saving schemes include post office monthly income scheme (MIS), PPF, post-office time deposit scheme, senior citizen’s savings scheme, post-office savings account and ‘Sukanya Samriddhi’ accounts.